Case No.:

(AC-Revision-175-1960

Court:

Court of Appeal

Issue No.:

1960

Principles

·  Landlord and tenant—Rent Restriction Ordinance—Eviction for default in payment of rent under section x i (a)—EfTect of extent of repairs made by landlord in evaluation of statutory rent—Rates Ordinance, 1954, ss. 5, 16 and 19

·  Evidence—Appeal Courts’ power to reexamine evidence inferred from proved facts

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A tenant of a shop defaulted in payment of the rent for some months. He later counterclaimed against the landlord that the rent he was paying for the last three and a half years was f above the standard rent. The landlord brought an engineer who testified that repairs were made in 1951, before the present tenant entered into possession, the cost of which was £S.93o. The tenant brought two contractors well known in the town of Port Sudan wl testified that the repairs would cost around £S.410 and £S.415 respectively The learned District and Province Judges rejected the evidence of the engineer without giving reasons as tc’ his credibility or reliability and accepted the evidenc’e of the two contractors. The parties had agreed that the tenant should pay the local rates—the learned Province Judge relying on sections 5 and 16 of the Rates Ordinance held that because the landlord was bound to pay the rates to the Council the tenant was therefore relieved from payment.
Held: (i) that the landlord was entitled to eviction under section it (a) for the tenant’s default in payment of the rent.
(ii) that the landlord was entitled to a monthly rent of £S.24.460m/ms and not £S.16.360m/ms as estimated by the learned District Judge nor £S.14.430m/ms as estimated by the learned Province Judge after cutting down the local rates from the rent.
(iii). That an appellate court has the power to re-examine the evidence given in the trial court in cases where the question in issue is the proper inference to be drawn from facts proved.
(iv) That though by the Rates Ordinance the landlord is bound to pay the rates, it does not follow that he is unable to contract with the tenant to pay him the rates: see section 19.
Benmax v. Austin Motors Ltd. [1955] 2 W.L.R. 418; dicta of Lord Reid at p. 442 applied; Hellenic Community v. Petit Bazaar (1956) S.L.J.R. 4 followed

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Judgment

(COURT OF APPEAL)

COSTIS TRIZIS LTD. v. IDRIS AHMED EL KANZI

(AC-Revision-175-1960.

Advocates: Mohamed Ibrahim El Nur… for applicant

                         Mutasim El Tagalawi…… for respondent

August 22, 1960. M. .A. Abu Rannat C.J.: —The facts of this case appear to be these: On July 14, 1957, the plaintiff Costis Trizis brought an action against the defendant Idris Ahmed El Kanzi claiming recovery of £S.110 being arrears of rent of a shop calculated at a monthly rent of £S.25 up to

Court: M. A. Ahu Rannat C.J. and M. A. ilassib J.

the end of June 1957. The plaintiff also claimed recovery of possession of the shop on the ground that the defendant failed to pay the rent, which was then lawfully due from him. The plaintiff is the registered landlord of plot 3 Block F.VlI, Port Sudan Town, and the defendant is the tenant of a shop, which forms a part of this plot. For convenience, I shall hereafter refer to the parties as landlord and tenant. On October 23. 1957, both parties appeared before the District Judge and the tenant paid in court to the landlord £S.142 made up as follows:

£S.110 which was due up to the end of June 1957.

£S.32 in part settlement of rent which fell due after July.

£S142.

lt was intimated at that sitting that the parties were negotiating a settlement.

On April 16,1958  the landlord was allowed by the court to amend his claim to include £S.150 being arrears in respect of the period July 1. 1957 to December 31. On June 1, 1958, the tenant claimed for the first time that the standard rent was £S.12 and counterclaimed for £S.329 which was made up as follows:

£               S.572        being the difference between the contractual rent and the standard rent for a period of forty-four months, i.e, from the date of entry into possession on December 20, 1954 to May 31, 1958.

Less £S.243    arrears of rent claimed up to May 31, 1958.

£                S.329

It is fitting to state here that the landlord admits that the rent of this shop was in 1951 £S.12 per montn, excluding the local rates which were payable by the then tenant. The landlord claims that he made improve ments to the shop before the present tenant entered into possession, that the improvements he made amounted to £S.930 and that he agreed with the tenant to pay £S.25 including local rates which he started to pay to the Municipality.

The tenant disputed the amount spent on improvements and also his liability to pay local rates. Following these disputed points the following issues were framed by the District Judge:

(1) Did the plaintiff do repairs to the plot after July 1951 and before defendant took possession?

(2) If so, what is the cost of repairs so done?

(3) Was it agreed between the parties before defendant took possession that the latter would pay municipal rates?

(4) If so, what is the amount of those rates?

(5) Is the standard rent (in view of the repairs done and the rates paid£S.25

(6) If so, is plaintiff entitled to recovery of the £S.243 as arrears of’ rent?

(7) If so, is plaintiff entitled to recovery of possession under section 11

(a) Of the Rent Restriction Ordinance?

In order to prove the first and second issues, the landlord stated that the cost of improvements and structural alterations amounted to £S.930 and that these improvements were carried out before any tenancy agreement was made with the tenant. In order to prove the cost of these improve ments and structural alterations, the landlord swore that he spent £S.930 in accordance with the items shown on Doc. No. 1. He was supported by the municipal engineer Hasan Ameer who stated that the Costs of the job shown on Doc. 1 are reasonable.

The tenant brought as a Witness a certain contractor, by name Mohamed Mustafa, who testified that the cost of structural repairs amounted to £S.410.528 Then the court called another contractor of Port Sudan by name Mohamed Sid Ahmed Abu Shama, who submitted a report Con taining twelve items of expenditure which in his Opinion cost £S.415.730 m/ms. In that report items 6, 7 and 8 which relate to a reinforced concrete ceiling, were valued by the said contractor at £S.238.

In his judgment, the District Judge deducted the £S.238 from the estimated cost on the ground that they were not reasonably necessary. He also reduced item 12, which relates to lighting system, from £S.50 to £S.18. According to the rules of arithmetic, the amount to be ruled out from ranking as increased rent under section 6 (a) of the Rent Restric tion Ordinance should have been Ls.159.730m/ms but the District judge decided that the amount which should rank for the statutory percentage is £S.243 It is not clear from his judgment how he arrived at this figure.

The District judge accepted the claim of the landlord that the tenant agreed to pay the local rates which were included in the monthly rent of £S.25, and found that the rates which the tenant was liable to pay amounted to £S.2.070m/ms Thus he decided that the standard rent should be:

£S.12.000m/ms        old rent

£S.2.290m/ms          for improvements

£S.2.070m/ms          for local rates

£S.16.360m/ms ‘ Total

On an application for revision by the landlord, the Province Judge cut out  the item for local rates and reduced the standard rent to £S.14.430 although there was no application by the tenant against the decree of the DiStrict Judge.

I shall deal first with the point as to why the two learned judges accepted the evidence of Mohamed Sid Ahmed Abu Sharna and rejected the evidence of the municipal engineer Hasan Ameer. The District Judge said: “In his written statement, plaintiff stated the figure £S.264 as being the cost of new roofing to the shop occupied by defendant and £S.88 as the cost of pulling down the old roof, and £S.50 as the cost of removing the old debris. In refutation of this, it was proved both by defendant’s witnesses and plaintiff on cross that the roofing was removed and new roofing done because the plaintiff built a first floor on the roof of the shop. In this regard the court called an experienced building contractor who stated that the old roofing of the shop was in good shape and that all the other shops adjoining the shop and having the same type of old roofing still exist in good condition and that the plainti removed the old roofing purposely for the construction of an hotel o the shop.”

The learned Province judge said in paragraph 7 of his judgment: “ to the amount of standard rent the plaintiff called PW.1 an architect Hasan Ameer (who produced Doc. P.1) and himself to prove that the ir roofing of the shop, later on occupied by defendant, cost £S.930 the parti lars of which are to be found in Doc. P.1 referred to above, it is he noted that PW.1 the municipal engineer Hasan Ameer was not in l’ Sudan when this concrete roof was made, and he did not, therefore, supel vise its construction. It is to be noted as regards Doc 1 that everythili was made first class: first class workmanship, first class mosaic floor-tile and first class electric equipment. The engineer never stated on f acts he based his estimates.”

With respect to the two learned judges, I find that the reasons by them do not justify the rejection of the estimates made by the plain and supported by a qualified engineer. The fact that the qualified engine did not supervise the work at the time of its execution, or that he was — in Port Sudan when the work was carried out, does not in my view weaken his evidence. Furthermore, the two contractors who gave dence for the tenant did not supervise the work at the time of construction.

The three witnesses who made the estimated cost of the alterations are in fact expert witnesses who gave their opinion as to that they think was a reasonable cost for the work done. Both judges did ii say that the architect was laying or that he was not reliable. On the principle laid down by the House of Lords in Benmax v. Austin Motor Co, Ltd[1955] 2 W.L.R. 418, there should always be a distinction between a finding

of a specific fact and a finding of fact which is really an inference from facts specifically found. In the course of his judgment in the above case Lord Reid said at page 422: “In cases where there is no question of the credibility or reliability of any witness, and in cases where the point in dispute is the proper inference to be drawn from proved facts, an appeal court is generally in as good a position to evaluate the evidence as the trial judge, and ought not to shrink from that task, though it ought, of course. to give weight to his opinion.” This principle is accepted and approved in Hellenic Community v. Petit Bazaar (1956) S.L.J.R. 4.

The learned Province Judge described the evidence of the landlord as shaky because he did not remember certain dates. These can easily be ascertained from the records, and some of the points on which he was cross.examined are not relevant to the point at issue. However, if there was the evidence of the landlord alone, I would accept the learned judge’s finding as in that case the question of credibility or reliability was in issue, but, we have the evidence of a qualified engineer who after examination of the work done, confirmed that the cost shown on Doc. P.1 was reasonable. The learned Province Judge stated that this witness never stated on what facts he based his estimation. This witness was never cross-examined on this point and if he was so asked he might explain why he agreed to the costs in Doc. P.1

I now come to the second point: that the structural alterations were only made for the purpose of building a first storey on the shop, and that all the materials used were first class and this was not necessary for the shop. These facts are correct, but they are not good reasons for excluding the expenditure made from ranking as increased rent. In the first place, these structural alterations were made at a tinie when the shop was vacant and no tenancy agreement with the present tenant was contemplated. In England there is a provision under section 5 of the Rent Act, 1957 (The Public General Acts, 1957, pp. 140-141) that if a landlord makes improvements to a dwelling house, he can increase the rent limit by 8 per cent,per annum of the amount spent on the improvements, provided that he gives notice of the proposed increase to the tenant beforehand and that the tenant on whom such notice is served may within one month apply to the county court for an order cancelling or reducing the increase on the ground that the improvement was unnecessary or that a greater amount was expended j than was reasonable. We have not such a provision in our law, but even if there was one, the facts show that there was no tenant at the time of the structural alterations.

In examining the facts of this case in their relation to the relevant Statutory provisions, there is no doubt that the landlord has incurred expenditure, and I thinlc he has certainly incurred expenditure, on a structural alteration, which in the modern sense constitutes improvements. as t was clear from the evidence that the work was done to satisfy modern Standards in a first class area of the city. For these reasons I think the landlord is entitled to 12 per cent, increase based on £S.930 expenditure on improvements and structural alterations.

Turning to the payment of rates, the learned Province Judge referred to section 5 and 16 of the Rates Ordinance, 1954, which provides that the rates should be paid to Local Government Councils by the owners of the property. I wonder how these sections can be interpreted to mean that the occupier (tenant) cannot be liable to pay the rates to the owner I if there is an agreement between them that the rates should be included in the rent. I should like to refer to section 19 of the Rates Ordinance, which reads:

“No agreement between the owner of any rateable property and the occupier thereof to the effect that rates shall be payable by the latter, shall for that reason alone be void but no such agreement :1 shall operate to release the owner from his liability for the payment to the Council of such rates and any payment made by the occupier shall be treated as made on behalf of the owner.”

The whole object of the Rates Ordinance is to make the owner Liable to the Council and has nothing to do with contractual agreements between the owner and the tenant.

In this case, it has been proved that the former tenant was paying rates in addition to the £S.12 standard rate. The words “to pay all, rates and taxes” in Doc. A.i were crossed out because under the Rates Ordinance the landlord was bound to pay them to the Council. Furthermore, there was no appeal by the tenant against the decision of the District Judge who allowed this item in ascertaining the standard rent. The result is that the local rates amounting to £S.2.800m/mS should form part of the standard rent. According to evidence, the standard rent shall be:

£S.12.000m/ms           rent in July 1951

£S.2.800m/ms             local rates

£S9.660m/ms    12 per cent,of £S.930 cost of improvements. The account shall therefore be as follows:

Ls.110.000m/ms      arrears claimed by landlord up to                   June 30. 1957, calculated at £S.25 per month.

-Ls.1.360m/ms     less 340m/ms for four months being difference between £S.25 and £S.24.460m/ms the standard rent.

Ls.108.640m/ms

Ls.269.060m/ms    standard, to May 31, 1958.

Ls.377.700m/ms Total amount of standard rent up to                                         

May 31. 1958,

Ls.142.000m/ms    the tenant paid to the landlord in court

                               Ls.142.000m/ms

 £S. 235.700m/ms   amount due from tenant up to May                                   31,1958

The last point is the claim for the recovery of possession of the shop n question. Having decided that the tenant was in arrears for £S.235.700m7ms, the landlord is entitled to recover possession under section 11 (a) of the Rent Restriction Ordinance. The application is allowed with costs here and in the courts below.

M. A. Hassib J.: —l agrees.

                                                         (Application allowed)